October 19, 2001


 NEM Winter and Spring Meetings

Please mark your calendar for NEM's winter meeting to be held in Houston, Texas on January 17 and 18, 2001. Chris Bernard of Entergy-Koch and Tami Pallas of CMS MS&T have generously offered to sponsor the winter meeting. Please also mark your calendar for April 2 and 3, 2002, (PLEASE NOTE: the April dates have been changed) the Annual Membership Meeting and National Restructuring Conference, that will be held at the Marriott Metro Center in Washington, DC. Please contact NEM headquarters if you are interested in speaking, sponsorship or table-top space at the conference.


 NOPR on Transmission Provider Standards of Conduct

FERC issued a NOPR for adoption of a single set of standards of conduct that would apply uniformly to natural gas pipelines and transmitting public utilities. The standards would govern the relationship of these transmission providers with all of their energy affiliates. The proposed rules would allow a transmission provider that participates in an RTO and that does not manage or control transmission facilities to request an exemption from the standards of conduct.

The Commission also requested comments on whether additional policies were necessary to limit transmission providers' abilities to grant affiliates undue preferences. FERC requested that parties provide evidence to support adoption of such policies, including the economic consequences. FERC was also interested in receiving information on the bidding activities of pipeline marketing affiliates.

FERC also requested comments on whether behavioral remedies for transmission providers, such as the standards of conduct, are sufficient to limit anti-competitive conduct or whether structural remedies, such as divestiture or divorcement, should be imposed. Finally, FERC asked whether codes of conduct governing power sales between investor-owned public utilities and power marketing affiliates that have been imposed as a condition of market-based rate authority should be formally codified. Comments are due to the Commission on November 19, 2001. Accordingly, NEM member should submits comments to headquarters by November 5, 2001, to allow for adequate time to incorporate all comments received. The full text of the Federal Register Notice and the Standards of Conduct NOPR are available on the NEM Website.

 NOPR on Capacity Release Standards

FERC issued a NOPR on capacity release standards proposing that interstate natural gas pipelines must permit shippers to recall released capacity and renominate the recalled capacity at each nomination opportunity provided by the pipeline according to the notice and bumping provisions applicable to interruptible shippers. The full text of the NOPR on Capacity Release Standards is available on the NEM Website.

 Conference on Western Market Price Mitigation

FERC will convene a technical conference on October 29, 2001, at 1PM, to discuss possible modifications to the current west-wide price mitigation methodology for the winter season. The full text of the Notice of Technical Conference is available on the NEM Website.

State Issues

New Jersey

 Basic Generation Service

The Ratepayer Advocate filed comments on Basic Generation Service (BGS) arguing that the utilities' proposal to procure all of the state's BGS requirements in a single auction held on a single day using an untested auction format should be rejected. The Ratepayer Advocate argued that since the winners of the auction will provide electricity on a wholesale level and the utilities will retain their retail relationships with BGS customers, the program is simply an outsourcing program for the utilities and is not a competitive BGS program as required by state restructuring law. The Ratepayer Advocate recommends that the BGS program for New Jersey contain three elements: 1) procurement of BGS for at least 30% of the state's residential and smaller commercial customers through a retail level RFP process; 2) an auction to procure no more than 10% of the state's BGS requirements, with additional auctions to be conducted only if the first one is successful, and 3) procurement of any remaining BGS supply requirements through a wholesale RFP process. The full text of the Ratepayer Advocate's Comments is available on the NEM Website.


 Rebuttal Testimony in ComEd Proceeding

NEM filed rebuttal testimony in the ComEd delivery services proceeding arguing that: 1) embedded cost methodologies should be used to set delivery service rates as well as metering and single bill option credits; 2) ComEd's embedded costs of rendering competitive products, services, information and technologies should be fully unbundled and provided to customers for shopping credits; and 3) the use of electronic signatures is valid under federal and state law. The full text of NEM's Testimony is available on the NEM Website.

Staff filed rebuttal testimony reiterating its support for the use of an embedded cost methodology for the design of delivery service rates. Staff also argued that neither federal nor state laws on electronic signatures prohibit the use of electronic signatures to satisfy Letter of Agency requirements. The full text of Staff's Testimony is available on the NEM Website.


 Consumers Interim Rate Relief Request

Staff filed a Report recommending that the Commission reject Consumers' request for interim rate relief. Staff argued Consumers' probable revenue deficiency is insignificant, and its current rates are just and reasonable. Therefore, interim rate relief is not warranted. The Attorney General testified that Consumers' request was not appropriate because the issue of the effects of Consumers' three-year GCR suspension and base gas transfer during the suspension should be examined as part of Consumers' final ratemaking case. The full text of Staff's Testimony and Report and Revisions as well as the Attorney General's Testimony and Revisions are available on the NEM Website.


 Order on Competitive Market Initiatives

DTE issued an Order in the first phase of the competitive market initiatives proceeding adopting a number of the suggestions recommended by NEM and other marketers. DTE ordered that: 1) customers' historic usage information should be included on customer information lists that and are to be made available to suppliers on an opt-out basis; 2) customer information lists should not be filtered to remove customers with late payment histories; 3) customers' service and mailing addresses, contact persons, and customer meter read cycle should be included on the customer information lists but customer account numbers will not be required on the lists at this time; 4) information regarding standard offer customers, as well as default service customers, should be included on the customer information lists; 5) the distribution companies must make the customer information lists available at no cost to suppliers; and 6) the use of electronic signatures for customer transactions is not prohibited by state law.

DTE ordered the formation of a customer information working group to: 1) develop bill messages and bill inserts regarding the customer information lists; 2) develop a schedule for updates to the customer information lists; 3) develop a format for the customer information lists to be followed by each distribution company; 4) develop the electronic means by which the lists will be made available to suppliers; 5) review the way in which the distribution companies make load profile category, meter type and service delivery point information available to suppliers; and 6) review the way in which distribution companies use active supplier lists. The working group is to convene on October 24, 2001, at 10AM.

Phase II of this proceeding will address the utility's role as an electricity broker. Phase II will also address the applications of electronic signatures, the technology necessary to implement them and consumer protections necessary to prevent their misuse. Customer information required for suppliers to successfully enroll customers will also be examined. Phase II issues will be discussed at a technical session to be held on November 14, 2001 at 10:00 AM. The full text of the Order is available on the NEM Website.